Discovering (and Challenging) Your Financial Values

My parents taught me nothing about money management. My dad opened a checking account for me in high school and showed me how to use the checkbook register. Beyond that, I was on my own. I never had any clue how much money my parents made, and very little sense of how much most things cost. Taxes and loans and bills and credit were all vague mysteries. Mortgages and retirement accounts weren't even on my radar. My family simply never talked about money at all.

My parents might not have taught me anything, but I learned things from them all the same:

I learned that when you moved into a new, larger, nicer house, you also bought a full suite of brand new furniture for every room in it.

I learned that it was okay to shop for sale clothes at department stores, but that the idea of used clothes was disgusting.

I learned that donating to Goodwill was fine, but buying from Goodwill was shameful.

I learned that you purchase only new automobiles, one for every adult driver. (Women get cars, men get trucks. Yes, I did grow up in Texas, why do you ask?)

We all enter adulthood with a personal ‘financial culture', a sense of what is acceptable and what is not when it comes to money. If your family, like mine, never spoke about money directly, some of your deep-seated assumptions may be imperceptible.

Recalibrating financial values As a fledgling adult, I had all kinds of unreasonable expectations, not the least of which was that I would coast along with the same high standard of living that my parents enjoyed during my teenage years. Even though I knew, if I had thought about it, that my parents had started out on a much lower rung — I can remember the Formica tables, vinyl chairs, and ancient matted carpets of my early childhood — no one had ever suggested that I would need to go through a similar sort of climb.

J.D.'s note: This point — that young adults cannot expect to have the same standard of living as their parents — is something I try to emphasize when I speak to college students. It's one of the things that trapped me, too. I think it traps many of us.

Like many kids of my generation, I got my first credit card at 19, and used it liberally without any sense of the damage I was doing to myself. When my near-minimum-wage income failed to support my expected lifestyle, Mastercard and Discover came to my rescue. It was many, many years before I understood enough to blanch at the expense of five rooms' worth of brand new department-store furniture, much less wonder whether they had been paid for with savings or debt.

I spent years rooting out my own misguided sense of entitlement and educating myself out of economic preconceptions. My college friends introduced me to trendy thrift and consignment clothing stores. I learned about depreciation and decided to buy only used cars, never new. Two years ago I paid off the last of our credit cards and foreswore consumer debt forever. If you'd asked me then, I would have said I had completed my transformation, fully recalibrated my financial values.

I was wrong.

Outside my comfort zone I lost my job last winter just as the market dried up in the recession. My partner took a cut in both hours and wage. At Christmas last year we were running on only 25% of our former salaries. By March I had a little freelance work and he had regained some hours, which put us back at around 60%. Still, our mortgage alone eats more than half our current take-home pay.

This is hardly the first time I've seen my income suddenly fall through the floor. Before, I used credit cards to make up the difference. This time when our earnings plummeted, we slashed spending even farther. In some cases this meant returning to earlier habits that — pressed for time and with plenty of money — I'd fallen out of, like using the library instead of buying books.

But it also challenged me to step outside my comfort zone and try things I'd never dared before. This is how, in the last several months, I came to brave the Grocery Outlet and the Dollar Store and Goodwill. And if my use of the word ‘brave' in this context makes you scoff, you must not have the derisive little voice in your head that I do, whispering that you're a failure, contemptible, poor.

Identifying preconceptionsNot all the values I absorbed as a child were detrimental. I learned that homemade gifts and cards can be more appreciated than store-bought ones. I'd probably be in better financial shape than I am if I'd hung on to my parents' culture of always eating at home, never in restaurants. (Alas, I grew up and became a foodie.)

You may choose to accept the values you grew up with, or reject them, or some of both. But before you can make true decisions about what you want to value, you have to identify your preconceptions, the little voices in your head that are too familiar to question.

First, discover your native financial culture by broadening your awareness of the alternatives. Ask older family or friends what they remember from times before you were born. Read about the economic attitudes of people in other countries. Seek out stories from people much richer and much poorer than yourself.

Second, challenge your inherited values by trying something new, even when you don't have to. Walk into a store that you've always disdained. Make something that you've always bought. Visit a neighborhood that you've always ignored.

I have two kids, stepdaughters aged ten and sixteen, and I desperately want to send them out into the world with all the financial context that I lacked. Part of that means active teaching of skills and concepts, like how to plan meals around grocery loss leader sales, or why forty years of compounded interest is more than twice as good as twenty. Part of it means creating a culture in our home where money is not a taboo subject, where we talk openly about wages and savings and expenses and debt.

And part of it, I hope, means being a living example. I walk with our girls into Goodwill with my head held high, as proud as if we were in the toniest department store in town.

Excellent post, Karawynn! “As a fledgling adult, I had all kinds of unreasonable expectations, not the least of which was that I would coast along with the same high standard of living that my parents enjoyed during my teenage years.” I live in a college town and work in rental property management. I’m amazed at what most of these students have as far as furnishings and cars, etc. And what they leave behind when they move out of a rental unit – like new small appliances, bikes, household goods, expensive clothes. And their parents pay for a lot of this… Read more »

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margaret

10 years ago

I’ve long been curious about the attitude that young people graduating from college can have the same lifestyle as their parents. I grew up in a wealthy neighborhood (although my own family was monetarily challenged) and I was constantly hearing funny stories about “starting out” and how “poor” my parents and my friends’ parents were when they were in their twenties. No one my age expected to immediately live like their parents. I wonder if it is my generation: our parents were born during the depression and we graduated into the 80s recession. It seemed that sometime in the late… Read more »

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Ms. Clear

10 years ago

Great read.

However, it’s my parents who are always telling me not to be so “cheap.” Well, mostly my mother. I don’t think she gets it. She doesn’t seem to remember her younger days that well, rather only the past ten years, when they’ve been doing so well.

Karawynn, thank you for this! I grew up in exactly the same sort of circumstances. My mother is baffled by my thrifty, coupon-clipping, yard-sale shopping ways. It reminds her, she says, of her parents, children of the Depression. But the funny thing is that growing up with thrifty parents doesn’t lead to good money management. My husband’s parents are tight with a nickel. He grew up feeling deprived (even though he was far from it!) and came into adulthood without real financial management skills, either. I think that’s the common thread – financial literacy, or the lack thereof. When the… Read more »

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Chickybeth

10 years ago

Thank you so much for this post! I can completely relate. My family never had money, but they never talked about it and so I had completely unrealistic expectations of what one person should be able to provide for on their own while going to college. Giving in and giving up the credit cards would have seemed like admitting defeat; like I just couldn’t handle it in the “real world”.

So thank you, for letting me know I wasn’t alone!

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ethel

10 years ago

I really like this post and the writer’s voice!

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RB @ RichBy30RetireBy40

10 years ago

Thnx K for sharing! It’s really healthy that younger people are going through tough times NOW, so they appreciate things later down the road.

Better to go bankrupt at 25, than bankrupt at 50. Although this downturn has been tough for many of us, especially myself I am absolutely THRILLED it’s pretty much over and we are rebounding nicely.

Everything from pay, to the stock market, to real estate, to employment are all getting better again. Just got to hang on.

Best,

RB

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Mrs. J

10 years ago

Okay, for the record, we don’t all come in with the attitude that we can have exactly what our parents have: there’s a reason my husband and I have Ramen Wednesdays!

But, we’ve gotten very lucky with fickle relatives: we have a gorgeous cherry dining table with chairs, a leather suite of furniture in our living room, and I carry a Coach purse because he has relatives who just got sick of the stuff. But if we’d had to buy it ourselves? Goodwill all the way! 😀

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Four Pillars

10 years ago

I’ll concede that our parents can influence our choices later in life but to blame them 100% for your financial issues seems a bit lame.

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Beth

10 years ago

It’s not about blame, at least not the way I read the post. We expect to learn things from our parents, life skills like chores and cooking — and money management should be part of that. But I didn’t get that either. My Mom was the bill payer in the family but she never sat any of us down (I have 4 siblings) and said “Here’s what I’m doing.” And yet, she did show me how to make bread and wash clothes and sew curtains. It’s interesting that I never thought to ask about the bill paying and that she… Read more »

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arg

10 years ago

Really interesting and well written, thanks!

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kz

10 years ago

Thanks for the great post – while I don’t think any of us blame our parents for negligent spending, you can’t deny the influence! This was a great reminder of my own financial legacy.

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Ophelie

10 years ago

I was talking to a friend yesterday — she’s in her forties, I’m 22, so it’s always interesting to share perspectives. Five years ago, she left her programing job to go back to school in arts. She went from making 100k+ to living off her savings. She had to radically change her financial values, and also examine those of her friends. All of a sudden, she couldn’t afford to go out three nights a week, buy new clothes every season, and buy a new car every two years. She told me that the hardest part of all this was that… Read more »

Money was something that was NEVER talked about in my family except for a few words here and there to explain that we didn’t have enough of it when I would ask for something as a child that my parents didn’t think I needed. I later learned that we actually had plenty of it and that was just the default response when I requested something that wasn’t necessary. I really wish we would have had more open and honest discussion about it. I feel like I would have appreciated and accepted it more if instead of saying “we don’t have… Read more »

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Dave

10 years ago

I wish I would have realized questioning my own personal finances and development more accurately when in college. I see so many college students that I was like—ignorant. I think if I reflected more on the financial values then, I would be much better off now.

Thanks for the post!

Dave LifeExcursion

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mimms

10 years ago

Great post, very much in line with what I expect here. I especially appreciated the reference to your earlier post with the sentence –

“And if my use of the word ‘brave’ in this context makes you scoff, you must not have the derisive little voice in your head that I do, whispering that you’re a failure, contemptible, poor.”

We all come from different places, and what is habit for one person is a tremendous achievement for another.

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Jennifer Thompson

10 years ago

An excellent post. My parents, too, never talked about money. While they always lived thriftily — my dad had been raised by a single mom, and my mother grew up on a farm — I never learned to save, and quickly absorbed the spend, spend, spend culture of Southern California when I moved there. I believed that since I was young and thin and pretty, I deserved all the trappings — particularly the clothes — of a wealthy woman’s lifestyle. This on a graduate student’s stipend, plus, of course, my trusty credit cards. It took years to climb out of… Read more »

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Denise L

10 years ago

This was a really good posting – timely and true! I came to this realization a few years ago when I left behind my two roommates and moved into a 1-br apartment. All of a sudden, cable TV and internet were unaffordable, the entertainment budget needed to be slashed, and my parents had to realize that I couldn’t afford a plane ticket to the family vacation spot. It was also good to point out that you need to occasionally reset your financial standard of living…it’s not a constant increase from year to year because circumstances change. My husband is back… Read more »

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TheWealthBoard

10 years ago

Thanks for a good read. While I won’t say that I had the same expectations when I was a young adult (I was dirt poor and knew it), I do know a lot of people that never really had any concept of personal finance until it was too late.

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SMB

10 years ago

Oh, man. Not only do we live in the same neighborhood and shop at the same Gross-Out, but we appear to share a history (right down to the part about growing up in Texas). My parents, too, gave me “zip” in the way of financial education. My mom taught me how to use the register, but even when I started bouncing checks they just got mad at me; it didn’t seem to occur to them that I needed further guidance. First credit card at 19, had to be bailed out a year later–again, they were angry, but didn’t talk to… Read more »

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Karawynn

10 years ago

Yes, the point I was going for was not blame but ‘mindfulness’ of influences … as Abby points out, parents modeling thrifty behavior doesn’t necessarily result in thrifty kids.

There’s a cultural imperative to *not* talk about money that I think can be damaging. I love the pf blog movement for helping to change that. 🙂

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Sandi_k

10 years ago

I really enjoyed this article. Two things stood out for me: 1) What we learn from our parents. I’m (lucky?) in that my mom was a single parent, and she was very open about money. From the time I was 9, I used to balance her checkbook for “fun” – I was a numbers geek even then. 🙂 I used to joke that I learned about negative numbers long before I took pre-algebra. 🙂 We had family meetings about how to spend our vacation fund (for two years, we skipped them, and had a pool built instead, with us doing… Read more »

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Manisha Thakor

10 years ago

Karawynn – Beautifully stated. Especially loved this passage: “As a fledgling adult, I had all kinds of unreasonable expectations, not the least of which was that I would coast along with the same high standard of living that my parents enjoyed during my teenage years. Even though I knew, if I had thought about it, that my parents had started out on a much lower rung – I can remember the Formica tables, vinyl chairs, and ancient matted carpets of my early childhood – no one had ever suggested that I would need to go through a similar sort of… Read more »

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Susan

10 years ago

I like this post because it really speaks to the financial baggage we carry with us. My parents also were very tight-lipped about money while we were growing up. We were tenant farmers in the midwest and having wealth was a class issue we were taught to disdain. This attitude was not consciously taught nor consciously learned but it has been a huge influence on my own attitudes towards money. Unfortunately, I seem to find myself constantly backing away from situations in which I could be a stronger earner in favor of the lower wages I do now earn. And… Read more »

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Kristin @ klingtocash

10 years ago

I don’t know what happened to our parents. I think they were so caught up in making our lives wonderful that they forgot to teach us the financial tools so we could have wonderful lives.

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Tyler Karaszewski

10 years ago

One thing that no one seems to mention directly, even here in the world of financial blogs, is that wealth and position accumulate over time. Your parents aren’t doing better than you because you’re a failure — they’re doing better than you because they’ve had 25 years longer in which to accumulate wealth and get promotions at work. Older people make more money because older people can get jobs that require 20 years experience, and they have more disposable income because their homes are nearly paid off. This is something we *don’t* tell our kids. In fact we tell them… Read more »

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friend

10 years ago

A writer who can write! This is a gift — for us the readers. Thank you.

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Kaila

10 years ago

I remember the standard of living gap when I moved out on my own after my first year of college and had to start living in the “real world.” The change was almost devastating (emotionally). In the long run, it pushed me to work really hard to get myself into a standard I’m comfortable with. The whole process was really good for me because it forced me to evaluate what was important and what wasn’t. I had a credit card, but I always paid the balance in full each month. My parents never taught me about money either, but luckily,… Read more »

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EscapeVelocity

10 years ago

I wonder if it’s partly a side effect of people having children later in life? Seems like middle-class couples often feel like they can’t have children until they’ve got the big house in the neighborhood with the good school district, so kids may just not be around for as much of the early years. Plus, of course, there are more careers now where kids right out of college can make jaw-dropping amounts of money. Nobody has twenty years of experience designing iPhone apps.

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Hunter

10 years ago

Expectations and a certain standard of living are what my wife and I fought about yesterday. Our first few years of marriage she enjoyed the six figure income that I was earning and when I got laid off in January and could not find another engineering job she had a hard time adjusting. Yesterday I asked her to cut my hair, I figured it would be a good way to save some money. She saw it as a small amount of money to be spending and we did not need to stoop to such levels. The argument wasn’t really about… Read more »

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elena

10 years ago

I would like to hear more about Karawynn’s adspting to such a huge salary loss this year.

Well, I can’t say I ever had an “expected” lifestyle when I moved out… Only one that, sadly, my husband showered me with. Prior to getting married and living together, we had only spent about seven weeks actually together… Where money was NEVER an issue and I was shown a lifestyle I had never known. (Shopping, eating out a lot, etc.) When we got down the hole a bit, I finally woke up to it and kicked our lifestyle into gear. We’re doing much better now, with savings and little debt. (Sorry, student loans AREN’T avoidable for everyone.) Never really… Read more »

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Karawynn

10 years ago

Elena: There’s a lot to say on the subject of ‘adapting to reduced income,’ but I’ve covered a part of it here on Pocketmint.

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mary

10 years ago

This was a great article. i am guilty of not making my child go without. she is the baby of the family and i always bought her expensive clothes and just took care of every need. well now , she is away at college. my hours have been cut and we all are doing without. thank goodness her college friends also took her and introduced her to walmart and thrift stores ! haha i have loved it. i always bought my clothes at thrift stores and bargain shopped so she wouldnt have to do without. DO NOT DO THIS PARENTS!… Read more »

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Lisa

10 years ago

Wow. When I was a kid, my parents argued about money all the time – my mum was the spender and my dad was the wannabe-saver. They got divorced.

I never realised how much of a financial education I got listening to my father explaining “opportunity costs” and “false economies” and so forth to my mum over and over and over again. In a way I just thought this was normal.

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John Bardos - JetSetCitizen

10 years ago

That is a great point that you and J.D. make, “young adults cannot expect to have the same standard of living as their parents.” People often seem to think they are entitled to riches and a comfortable life without effort. We grew up getting whatever we wanted and we expect it to continue when we live on our own. I think this is the cause of the generally abysmal levels of service and terrible attitudes of workers in so many companies now. Everyone thinks they are a rock star and don’t want to put in the hard of the lower… Read more »

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Amy H.

10 years ago

I thought this was a very well-written and interesting article. My parents, happily, managed to raise their two children with what seem to have turned out to be their own values about money — not spending beyond one’s means, saving up for things rather than putting them on credit, always paying yourself first, etc. This piece really made me think about ***how*** they did that. I’m not really sure . . . it will be an interesting subject to keep thinking about. Are there places where I have diverged from that over the last 20 years that I’ve been living… Read more »

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Denise E.

10 years ago

This is an excellent article that goes into the value system behind our possible predjuices. It was well written and interesting. I look foreward to reading more from you. Keep up the good work.

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Piccolina

10 years ago

More posts like this, please!

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Pirate Jo

10 years ago

“Unfortunately, I seem to find myself constantly backing away from situations in which I could be a stronger earner in favor of the lower wages I do now earn.” It’s not necessarily unfortunate. Those higher-paying jobs usually involve a lot of stress and responsibility. Why *shouldn’t* that be something to back away from? We don’t have to “prove” anything to anyone. I certainly don’t want a lot of stress or responsibility at work. I’ve had those jobs and absolutely hated them. I’ve discovered that I’m really quite content at a job if I can just work at it from 8… Read more »

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Carissa

10 years ago

These are great thoughts!

(… and Yay! Glad you used my father’s day cards..)

I agree homemade gifts and cards DO mean a lot more! 🙂

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Christine T.

10 years ago

Finances were a taboo topic in my home too growing up. I started working when I was 15 but spent everything I made, which pretty much continued until last year (17 years!) When I started to figure out what not to do I realized that my parents were not making good financial decisions. I think that was a big reason why they did not want to discuss it, that they were embarrassed and ashamed of their financial habits. I wish they would be less hard on themselves and just look at ways to make things better but it’s hard for… Read more »

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Adrian

10 years ago

Karawynn, You’re right on the mark. I feel that in our North American culture (as well as else where I’m sure) money needs to become less of a taboo topic and a more open and accepting financial dialogue should be established between parents and children as well as lessons about financial management. Too many of us were not educated by our parents in regards to finances, and while not entirely the reason, this is surely a LARGE reason why we lacked the knowledge to avoid ending up in debt and making such silly decisions/ purchases. I feel that hopefully our… Read more »

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Brent

10 years ago

I think I was kind of an oddity, I learned some principles from my parents, but was missing on others, I knew about buying stocks, balancing a check book, and how too shop sales, that value could be found anywhere and junk could too. But exactly how to go about things I just lucked into. I’m a penny pincher by nature. The spending comes from when I feel guilty about this. Friends want to go out, they want to spend, they want to see me have nice things, they think because of my job I must be loaded and can… Read more »

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Abby

10 years ago

I’m a lurker who felt compelled to come out to speak up about how much I enjoyed this post. It’s nice to read something so well written.

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Seana Davidson

10 years ago

Value Village Rocks! Craig’s list is the place to look before heading for the store. It is amazing what we throw away. Plenty of us have bought something, never wore it, and finally donated it. I have found kids coats, etc., that likely were barely worn. It is smart shopping, not shameful shopping. I grew up in an educated family consisting of my three brothers, and my artist mom. Money? What money? My mother’s family was wealthy, but she was not. We cruised garage sales, thrift stores and recycled things. We ate healthy, weird food at home. You can be… Read more »

As a soon-to-be-parent, I am so interested in this conversation. I grew up in a very similar family situation. My question is HOW do you create this culture with your kids?? How and when do you talk about these things? I want details. Thanks!

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Lynn

10 years ago

@ Menace – I am starting young with my son (he’s 7). I find that teaching moments naturally come up all the time. He asked the other day about why people would give other people money to help with their business (a show about that was on TV). It sparked an interesting conversation about investing. I do not go into the details of our personal finances right now since he’s too young and I don’t want to burden him with things like that at his age. I keep things light. I show him bills but do not let him know… Read more »

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Hi! I’m J.D. Roth. I'm here to help you master your money — and your life.

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